HOW MUCH DO YOU PAY INTO SOCIAL SECURITY?

The protection offered by the Social Security Act is not free. If you work, you pay into Social Security out of every paycheck.  If you are self-employed, you pay into Social Security every time you file quarterly or annual tax returns.

I began paying into Social Security when I got my first part-time job in high school, back when I was 16 years old.  I've been paying ever since.

So, how much do you pay?

In 2018, most workers will pay 6.2 percent of their pay into Social Security.*  They see this on their payroll deduction stub as "FICA," which stands for "Federal Insurance Contribution Act." 

In addition, your employer will pay 7.65 percent of your wages into the Social Security program.  If you add those two taxes together, the federal government is collecting almost 15 cents for every dollar you receive in wages.  This is in addition to federal income tax, of course.

This tax supports 3 very large federal programs:  (1) the old age and survivors pension program, (2) the disability insurance program, and (3) Medicare.

For the most part, every worker is required to pay into Social Security.  With very few exceptions, there is no way to opt out. 

When you reach retirement age, retirement pensions are pretty much automatic.  If you paid in you can take money out when you are old enough.

Disability benefits, however, are more tricky.  This is because of the very strict definition of disability under the federal regulations. To Social Security, disability means the inability to work at any full-time job.  Most individuals who file disability claims will be denied because they don't meet Social Security's very stringent definition of disability.

Getting a disability benefit also requires a sufficient number of work credits, officially called Quarters of Coverage.  Simply put, you must have worked and paid enough in FICA taxes to be covered by Social Security's disability provision.  Not everyone has enough work, or enough recent work, to be covered.

An entire legal industry has grown up around lawyers who assist claimants in getting disability benefits.  A legal representative may not charge you a fee, however, until your claim is won--and only then if back pay has been recovered.  In most cases, Social Security will arrange to pay the representative out of your back pay, according to a pre-arranged fee agreement (and in accordance with Social Security's rules on fees).